There Is No Total Revenue Test for Price Elasticity of Supply

question 93

Multiple Choice

There is no total revenue test for price elasticity of supply because:

• A) price and quantity are inversely related.
• B) price and quantity are usually directly related.
• C) total revenue will usually change in the direction of a supply price change.
• D) both B and C are true.

---

Definitions:

Marginal Cost

The extra expense associated with manufacturing an additional unit of a product or service.

Marginal Revenue (MR)

The incremental earnings obtained from the sale of an additional good or service unit.

Marginal Cost (MC)

The increase or decrease in the total cost that arises when the quantity produced changes by one unit.

Production Level

The quantity of goods or services produced by a business, factory, or industry over a specific period.